Mortgage lending is staying on track despite a fall in the number of people borrowing money to buy a house for themselves, the Council of Mortgage Lenders said.

Some £34bn was handed to people during August, roughly the same as July's figure of £34.1bn and £1bn higher than the same month last year.

But the CML said there has been an 11% year-on-year fall in people borrowing money to buy a house, and a 12% drop in remortgaging.

Instead, other lending, which mainly covers buy-to-let investors, jumped by 37% compared with August 2006.

The CML said the buy-to-let market is continuing to prosper thanks to house price growth, rent rises and tenant demand.

It also said the impact of the Government's controversial Home Information Packs is still unclear.

HIPs were introduced on August 1 for four-bed and larger properties, and on September 10 for those with three bedrooms.

The CML added that the statistics also pre-date the financial crisis at Northern Rock, and it is unlikely that the upshot of that will be seen in the data until the end of November.

Fixed-rate products continued to be popular during August, accounting for 78% of all mortgages, up from just 59% in August last year.

But the group said that with interest rates now potentially set to fall, tracker rate deals may become more desirable as consumers hope to make the most of any cuts in the base rate.

Michael Coogan, CML director-general, said: "Affordability clearly remains challenging but there may be some relief for borrowers with expectations of an interest rate cut, perhaps as early as November.

"We are set to have a very segmented market for some months to come. The sub-prime sector is still facing funding constraints, while mainstream fixed-rate deals have begun to get cheaper.

"As lenders move to price for the risk they are taking on, mortgages are set to become more expensive for customers who have poorer credit histories. Now is the time for consumers to look to improve their credit status to keep their borrowing costs as low as possible."

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